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Hi Low modal Baker The manufacturing costs for Baker Industries for the first six months of the year are provided below. Use the high-ow method
Hi Low modal Baker The manufacturing costs for Baker Industries for the first six months of the year are provided below. Use the high-ow method to determine and (@) variable cost per unit b) total fixed cost January February March April May June Total Mg Cost $237.000 $225,000 3279,000 $263,000 $297,000 $325,000 Production Volume 5,700 5.000 7.000 6.500 8.000 9,000 units units units units units units Step 1: Determine Variable Cost per Unit High Low Diff VC per unit Cost Volume Step 2: Determine Total Variable Cost - high levels of activty Var costunit Volume Tot VC High X Step 3: Determine Total Fixed Cost - high levels of activity Total cost Tot VC Tol FC High Now ... check your calculations Repeat Step 2: Determine Total Variable Cost - low levels of activty Var costunit Volume Tof VC Low Repeat Step 3: Determine Total Fixed Cost - low levels of activity Total cost Tot VC Tot FC Low Finally ... write an equation to model the behavior of the mixed cost Plug in your high and low values to see if the equation works Plug in other levels of recorded activity to see if the equation is close Variable Cost per Unts of Total Food Unit Activity Cost Total Cost
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